Results from last week’s municipal elections, published yesterday, showed Hamas sweeping to power in major towns, raising the prospect that Israel might have to hand power in Gaza to an organisation ostensibly dedicated to its destruction.

The Palestinians are to hold parliamentary elections on July 17, three days before the original date for the pullout. However, Israel’s Prime Minister announced yesterday that the withdrawal would begin in mid-August.

Silvan Shalom, the Foreign Minister, gave warning that Israel could even cancel the withdrawal if Hamas won the July elections. “I think the Palestinian Authority should do everything possible to prevent Hamas running for election unless it cancels its military wing,” he said. “There is no place, nor can there ever be, in a democratic society for a political party that bears arms.

“It seems to me unreasonable to move forward with the implementation of the disengagement plan as if nothing had happened and hand over the territories only for Hamas to create there a ‘Hamastan’.”

The late Yassir Arafat’s long-dominant secular Fatah faction faces a very real challenge from its younger Islamist rival. Fatah came out ahead in the municipal elections, but Hamas won in the all-important major urban centres. Election officials said that Fatah captured about 50 of 84 municipal councils and Hamas 30, including Rafah in Gaza, and the West Bank town of Qalqilya.

Israel’s insistence that Mahmoud Abbas, the President of the Palestinian Authority, must confront and disarm Hamas runs counter to the Fatah leader’s strategy of neutralising the militant groups by engaging them in the political process.

Israeli officials frequently voice frustration at the Palestinian Authority for failing to crack down, but the authority’s leaders insist that they cannot risk provoking civil war and point to three months of relative calm as a vindication of Mr Abbas’s strategy.

Nasser Youssef, the Palestinian Interior Minister, argued that by taking part in the elections Hamas was tacitly accepting the 1993 Oslo accords with Israel under which the Palestinian electoral system was created. “Hamas knows this election is based on Oslo and the road map,” he said, referring to the more recent peace plan. “Hamas knows that important changes have taken place.”

Hamas leaders, while insisting that they will not recognise Israel’s legitimacy, concede that they have no choice but to accept the political reality of its existence. The assassinated Hamas founder Sheikh Ahmed Yassin offered a long-term hudna (truce) conditional on Israel’s withdrawal to the pre-Six Day War borders and a settlement of the most contentious issues of Jerusalem and Palestinian refugees abroad.

The removal of 9,500 Jewish settlers from 21 settlements in Gaza and four in the West Bank is expected to last several weeks, with many settlers likely to resist. But Mr Sharon said he would delay it until mid-August and the end of Tisha Bav, the Jewish mourning period for the destruction of the two biblical temples in Jerusalem.

The postponement has led to speculation that Israel’s military and civilian administrations may not be ready for the vast operation. Senior officers insist they will be ready on either date, and Mr Sharon’s Government has begun to counter the preparations of protesters against the move, who have threatened to bring the country to a halt.

On Sunday Niria Ofen, a West Bank settler, was jailed without trial until the end of September on suspicion of planning attacks on Palestinians. Security officials indicated that it could be the first of many detentions. Mr Ofen, from the far-right settlement of Yitzhar, was suspected of “violent, illegal activity, including terrorism”, according to Israeli reports.

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